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Casino Supplier Doing Brisk RFID Business

On Friday publicly-traded casino supplier Gaming Partners International Corporation announced in its Q1 financial results that it is doing a brisk business in RFID chips.
May 16, 2005This article was originally published by RFID Update.

May 16, 2005—There has been increasing press coverage of RFID-enabled chips in casinos. Late last week, the Wall Street Journal ran a front-page Section B story reporting that the Hard Rock Hotel & Casino in Las Vegas had equipped its high-roller blackjack tables with RFID "smart chips" from Progressive Gaming International Corporation. And earlier this year, CNet reported on the opening of Wynn Las Vegas, a $2.7 billion mega-resort that will have RFID installed at its betting tables.

Then on Friday Gaming Partners International Corporation (GPI Corp), the publicly-traded casino supplier equipping Wynn with RFID, announced in its Q1 financial results that it is doing a brisk business in RFID chips. The company's president and CEO Gerard Charlier said in a statement, "We are particularly pleased by the increase in sales orders for RFID, after the first quarter, chips to prestigious casinos in the U.S. We started developing RFID chips some 10 years ago. Thanks to the past years of experience, we are able to imbed microchips in all of our gaming chip products with such efficiency that it is virtually impossible for dealers and players to notice any difference in the feel or handling of these chips. Unit prices of chips and readers are now low enough to make it attractive for casinos to invest in these products and improve the security and efficiency of their table game management systems."

By equipping casinos with RFID readers and RFID-tagged chips, "the house" will be able to detect and monitor those things which the ubiquitous, human-manned video cameras often miss: card counting, dealer mistakes, chip counterfeiting, and chip theft. With every chip in the casino tagged, the possibilities for the detection of scams and loss centers are endless. Indeed, the gambling industry is probably approaching RFID-enabled visibility in much the same way as the supply chain folks: they can already quantify profound efficiencies to be gained, but they expect that even more as yet unimagined benefits will reveal themselves only after the systems are in place.

Inventory management aside, RFID will enhance the marketing machine that casinos have become. Current estimates indicate that casinos "comp" (give freebies to particularly lucrative players as encouragement to keep gambling) 20 to 30 percent above what is optimal. Tracking chips will enable a much more systematic and efficient approach wherein the most valuable gamblers are identified by computer. The comps can then be more accurately doled out, and of course, so too can the mailed coupons and incentive packages enticing the players to "visit the casino again soon."

In addition to Progressive Gaming International and GPI Corp, another company to watch is Shuffle Master, who in December paid $12.5 million for two key patents -- 5,735,742 and 5,651,548 -- related to the use of RFID in casinos. Patent '742 covers an RFID system that allows the instant inventorying of every gaming chip in a casino, and '548 describes a method of tracking chips as they are moved around on casino gaming tables.

With so much of the activity in RFID happening in the supply chain, outside the layman's field of vision, its use in casinos may end up being a first introduction to the technology for much of the public. Surely, if the Hard Rock and Wynn demonstrate ROI on their RFID initiatives, the technology will take root up and down the Strip in only a matter of years.

Read GPI's Q1 financial results
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